Post-open Review

Post-open bounce traps longs, sellers pounce.

Greeting the open unchanged at 2888.00-2889.00 was essentially a standing-stop. That’s a difficult and dangerous setup to pick one resolution or the other. Not only for the lack of momentum, but also for the attraction to unchanged that would likely inhibit or doom a post-open trending attempt.

At least a narrowing range greeted the open, too, so some trending attempt or attempts would be possible. And there were trending attempts. First a dip down to 2885.50 and then its reaction up to almost 2893.00. Both overlapped unchanged, and that influence wasn’t finished, as another reversal slid back into negative territory at 2880.25.

The grace period was invoked, and very narrowly triggered no-bias. But as I described in real-time in the chaRTroom, we’re treating it as a noN-bias that doesn’t have any bias requirement. Meanwhile, oversold RSIs at yesterday’s 2877.25 low has been neutralized.

It’s being probed down to 2871.50, under room for noise. And it must be rejected back above 2880.25 or optimally 2884.50 through a relevant timing window to avoid putting into play 2857.00. Back above 2878.00 would be the first signal a recovery is being attempted.

REMINDER: I’m away from the screens after this morning… So, Daily Spot and Market Wrap will be published overnight.

The overnight attack on 2884.50 was recovered to attack the 2895.50 bias-down signal before the open. Its reaction down to within 2 ticks of the 2888.75 bias-down target was retraced entirely. Ultimately, the bias-down target was exceeded through 10:15 to renew the bias-down signal.

Renewed bias-down targets were essentially 2884.50 and 2880.25. Both have been probed down to 2877.50.

Exiting the bias window back above 2888.75 would have upside potential to fill the gap at yesterday’s close back up to 2899.00, possibly also launching a more powerful rally. Meanwhile, oversold RSIs at the 2877.50 low require a retest. Neutralizing its test and exiting the bias window back above any relevant level could start to seal a bottom.

Testing the 2877.50 low could visit 2875.00. Any lower through a relevant window would start to target 2857.00, and more so, put the market on defense. Currently, the drop from last week’s highs could prove to be backing-and-filling to negotiate negative sentiment ahead of Friday’s Employment Situation report. Any deeper for any longer would start to signal a negative reaction coming from Friday’s report.

Meanwhile, a bounce to 2885.75 is trying to reverse up prematurely, before neutralizing oversold RSIs. Which could happen, albeit less likely. But back under 2882.50 would signal the bounce was a detour, and the low’s retest remains intact.

Post-open dip is retraced, but not reversed.

The overnight dip to 2892.00  had recovered to 2898.25 resistance, where the open was greeted an hour later. Almost suddenly, post-open action plunged through the 2895.50 bias-down signal to test the 2888.00 bias-down target by almost 2 points.

Only one of the bars probing 2888.00 was a detached bar, and it wasn’t confirmed by a second. Rallying almost straight up from there to 2900.00 barely invoked the grace period, which triggered noN-BIAS.

Offsetting tests of both bias-up parameters was almost put into play. So was a retest of the 2888.00 bias-down target. Either remains possible. But even if we knew which, with 100% certainty that one or the other was required, the path there would not be direct or reliable — nothing like the two legs that already played out — primarily because the opening dip’s recovery never recovered into positive territory.

REMINDER: I’m traveling this week, and will have a staggered intraday schedule after the Market Tour and opening hour.

Bias signal delayed at last-minute, again.

It happened yesterday morning, too, sort of. This morning was on its way to triggering no-bias, cleanly recovering above the 2989.25 bias-down signal by 10:15. That would have put into play an offsetting test of its 2907.50 bias-up signal.

In fact, 2907.50 was touched… within 3 minutes of 10:15. Suddenly, the clean no-bias invoked the grace period. And the grace period has held to trigger no-bias.

Yesterday morning the bias signal being tested within 3 minutes of 10:15 was the only bias signal that had been touched. That’s more common, resolving either in triggering the bias, or not triggering it. And not triggering it resolves either in no-bias or noN-bias.

This morning the bias signal that invoked the grace period is the second bias signal tested. Trending from one bias signal to the other entirely within the opening period is rare. It reflects as much sentiment as triggering a bias and trending to its target.

So, sellers were almost marginalized by failing at an attempt to trigger bias-down. Rewarding buyers so quickly forced them to confirm their control, which failed. Effectively sellers get a second chance by default.

An offsetting test of the 2898.25 bias-down signal is in-play. Having been tested already, it won’t become “unfinished business” if not met this morning. This is still a no-bias environment, so probing beyond either bias signal — extending any higher — would require being retraced.

Morning trending may skip a day.

The open gapped down to this morning’s 2909.00 bias-down signal. And ranged there. Touching the 2907.00 overnight low reacted up to test 2911.00, but dipping back down still overlapped 2909.00.

The grace period was invoked, and maintaining a recovery above 2909.00 would have triggered late no-bias for an offsetting test of the 2818.75 bias-up signal. A little upside momentum back above 2912.00 would would help to at least fill the gap back up to yesterday’s 2914.75 close.

Just testing “higher prior lows” or the prior high from yesterday afternoon’s range is not trending. Only breaking lower would qualify as trending this morning. Regardless of being too late for putting into play the bias-down target, or of a bias-up target outstanding, fresh lows could extend.